Review of Veblen’s "The Theory of Business Enterprise",
by Robert Rives LaMonte.

The International Socialist Review.
A Monthly Journal of International Socialist Thought
Vol. V (July, 1904-June, 1905), Chicago, 1905

Vol. V, No. 12, June 1905, pp. 726-739
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Veblen the Revolutionist.

It must have been highly gratifying to every Marxian to find that the first article in the INTERNATIONAL REVIEW for April was devoted to calling attention to the work of Thorstein Veblen, the greatest exponent, who has yet arisen, of the psychological effects of economic causes. Unfortunately the article is by a writer whose ignorance of Marx is eclipsed only by his ignorance of Veblen.

While it is not worth while to dwell upon it here, it may be noted in passing that Comrade Walling has not yet emancipated himself from the handicap of the Great Man theory of history, and is still looking for Providence (?) to raise up an American Moses to found an American Socialism (God save the mark!) and free the American toilers from the bondage of Capitalism. A closer study of his own pet Great Man, Veblen, would have led him to "put not his trust in princes," but to rely upon the "Cultural Incidence of the Machine Process" to develop "socialistic disaffection" among the industrial workers, and he would thus have remained upon the solid ground of the teachings of Karl Marx, who, he tells us, "has been outgrown in Europe" and "must become an historical reminiscence in the United States."

While the attempt to establish an antithesis between the teachings of Marx and those of Veblen was of immense service to the meretricious rhetoric of Comrade Walling, it is much to be deplored, for it is but too sure to cause many revolutionary Marxians to whet their tomahawks for Veblen.

Most socialists have hitherto accepted as axiomatic, as it were, this statement of Marx in the Preface to the Critique of Political Economy, "The mode of production obtaining in material life determines, generally speaking, the social, political, and intellectual processes of life." But they have been unable and have apparently cared but little to explain how psychological processes were moulded by material and economic causes. Even Labriola was little more than suggestive along this line — merely stimulated thought upon it. Now it is the peculiar merit of Prof. Veblen that he has explained the modus operandi, by which economic causes produce psychological effects. In this field he is not only facile princeps, he is practically alone. His "Theory of the Leisure Class" is, in the writer's judgment, the most serious contribution to Socialist thought since the Communist Manifesto. But Veblen is not great as a rival of Marx, but [727] as an expounder of Marx, a developer of Marxian theses. It is not too much to say that all his best work is nothing more than Marxian exegesis.

But Comrade Walling is not wholly to blame for having misapprehended the nature of Prof. Veblen's work. Part of the blame must rest upon Veblen's shoulders, for he never gives credit to Marx and Engels, but constantly assumes that he, Veblen, is an original investigator. In this respect Thorstein Veblen and Achille Loria are curiously alike. Writing in the INTERNATIONAL SOCIALIST REVIEW for Sept., 1900, of the latter's book, "The Economic Foundations of Society," the present writer said: "Curiously enough in this long book he never once gives Marx the credit of having discovered this theory, but constantly talks as though he — Loria — had revealed it to a waiting world." In a recent number of the Chicago Socialist Comrade Untermann translated a passage from one of Engel's prefaces to one of the posthumous volumes of "Capital" making substantially the same charge against Loria. But in this respect Veblen is not so egregious a sinner as Loria, for he gives frequent references to Marx in his foot notes. But on the other hand at times — either ignorantly or intentionally — he positively misrepresents the teaching of Marx and Engels, as in the foot note on page 340 of "The Theory of Business Enterprise," where he says that the scientific socialism of Marx and Engels "was a product of Hegelianism 
blended with the conceptions of natural rights, its chief count being the 'claim to the full product of labor.'" In his review of the book just referred to the editor of this REVIEW showed how erroneous was this statement that the chief count of Marxian Socialism was the "claim to the full product of labor." One wonders how Prof. Veblen would harmonize "the conceptions of natural rights" with this famous sentence from the Communist Manifesto: "the theory of the Communists may be summed up in the single sentence: Abolition of private property."

Comrade Walling's ignorance of Marx is so obvious it re-requires no demonstration. His ignorance of Veblen can best be shown by printing in parallel columns the following excerpts from Walling and Veblen:

Walling.

The capitalist system will not fall of its own weight. There is no possibility of a cataclysm. The problem of disposing of the growing surplus for which foreign markets are so urgently demanded, can be easily disposed of by the ruling class. The methods of doing this are two-fold. Either the country 
	VEBLEN.

The persistent defection of reasonable profits calls for a remedy. The remedy may be sought in one or the other of two directions: (1) in an increased unproductive consumption of goods; or (2) in an elimination of that "cutthroat" competition that keeps profits below the "reasonable" level. If enough of the work or of the output is turned to wasteful expenditures, so as to admit	
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can be hurled into international war and all the wasteful preparations that precede and degradations that follow international war, or a benevolent feudalism can be developed. If the trusts continue their present rapid rate of growth, the latter seems the more likely outcome.

How the surplus will be disposed of in that case, Prof. Veblen showed in his recent book on the leisure class in America. Here Veblen conceded that the business man himself does not waste any vast sums in consumption, however wasteful and anti-social may be his operations in production.

In consumption it is his wife and 
children who spend the money. To the possibilities of consumption in this line, there is no limit. If the money-making sport comes to an end on account of the complete organization of industry by the great financiers, then the vast sums formerly manipulated by the business men for various speculative purposes will be entirely turned over to his wife and children who have already made such splendid records in extravagant living and "conspicuous waste."

In the book just mentioned, Prof. Veblen not only shows this waste, but he analyzes its causes. These are an effort to spend money in an emulative manner in order to make obvious to all observers either the amount of wealth owned or the length of time it has been in the possession of the family. Expenditure, in other words, is not for material brute comforts as Marx and all his followers have supposed. To such expenditures there is a physical limit. To the very "spiritual purpose" on the other hand of showing off a supposed social superiority which may take the form of innumerable houses, servants, diamonds,
	of but a relatively slight aggregate saving, as counted by weight and tale, profitable prices can be maintained on the old basis of capitalization. If the waste is sufficiently large, the current investment in additional industrial equipment will not be sufficient to lower prices appreciably through competition.

Wasteful expenditure on a scale adequate to offset the surplus productivity of modern industry is nearly out of the question. Private initiative cannot carry the waste of goods and services to nearly the point required by the business situation. Private waste is no doubt large, but business principles, leading to saving and shrewd investment, are too ingrained in the habits of modern men to admit an effective retardation of the rate of saving. Something more to the point can be done, and indeed is being done, by the civilized governments in the way of effectual waste Armaments, public edifices, courtly and diplomatic establishments, and the like, are almost altogether wasteful, so far as bears on the present question. They have the additional advantage that the public securities which represent this waste serve as attractive investment securities for private 
savings, at the same time that, taken in the aggregate, the savings so invested are purely fictitious savings and therefore do not act to lower profits or prices. Expenditures met by taxation are less expedient for this purpose; although indirect taxes have the peculiar advantage of keeping up the prices of the goods on which they are imposed, and thereby act directly toward the desired end. The waste of time and effort that goes into military service, as well as the employment of the courtly, diplomatic, and ecclesiastical personnel, counts effectually in the same direction. But however extraordinary this public waste of substance latterly has been, it is apparently altogether inadequate to offset the surplus productivity of the machine industry, particularly when this productivity is seconded by the great facility which the modern business organization affords	
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laces, etc., there is no limit whatever. There need be no more crises or underconsumption if capitalists work this outlet for its full value.

Between international war and "conspicuous waste" there is no danger of the capitalist ever becoming seriously embarrassed by the surplus. In Marx's time the petty bourgeois ideal of personal economy and rational living prevailed widely. In our times the ruling element in the ruling classes everywhere are troubled with no such scruples. Even the "simple life" requires enormous expenditures in charity and display of a "quiet" kind.
	for the accumulation of savings in relatively few hands. There is also the drawback that the waste of time involved in military service reduces the purchasing power of the classes that are drawn into the service, and so reduces the amount of wasteful consumption which these classes might otherwise accomplish.

So long as industry remains at its present level of efficiency, and especially so long as incomes continue to be distributed somewhat after the present scheme, waste cannot be expected to overtake production, and can therefore not check the untoward tendency to depression.
Theory of Business Enterprise pp. 255-6-7-8.	

It will be seen that it was fortunate for Comrade Walling's purposes that he did not read Veblen before attempting to expound his teachings.

In his seventh chapter (in The Theory of Business Enterprise) on "The Theory of Modern Welfare," Prof. Veblen gives an interesting and original theory of crises and depression. This may be regarded, and undoubtedly Prof. Veblen so regards it, as an attack upon and a substitute for the Socialist theory of crises popularized in Bellamy's "Parable of the Water-Tank." The gist of the theory is that crises and depression are to be traced to disparity existing or arising between the earning capacity and the capitalization of business enterprises. "Depression is primarily a malady of the affections of the business men." As a substitute for the Socialist theory, this theory is up in the air — pure moon-shine. There is nothing to start the chain of events so clearly analyzed by Prof. Veblen. It is the lack of purchasing power of the working class that punctures the balloon of loan-credit and serves as the starting-point for Prof. Veblen's whole cycle. As an addition or complement to the ordinary Socialist theory, it is difficult to cavil at Prof. Veblen's theory. As an independent theory it is without foundation, and is utterly inconsistent with Economic Determinism which is the foundation of most of Veblen's work.

Prof. Veblen himself hints at the necessary hard-fact foundation for his psychological superstructure on page 190 (Business Enterprise): "The readiness with which contracts of purchase and sale are negotiated is appreciably greater in brisk times than in times of depression; that, indeed, is the obvious difference between the two."

What are the chief lessons that we as Socialists can learn from [730] Prof. Veblen, especially from his later book, "The Theory of Business Enterprise?" In attempting to answer this, we must bear in mind that Prof. Veblen's conclusions are not only most carefully guarded, but are often purposely hidden and obscured. This is not surprising when we remember that when he wrote his books, he was working as one of John D. Rockefeller's "hired hands."

But if we make due allowance for this difficulty in finding positive, definite, clear-cut statements in his books, I think it is fair to say we will find that, among other things, Prof. Veblen teaches:

First. That Socialism is inevitable.

Second. That the Socialism generated by the "Cultural Incidence of the Machine-Process" is, of necessity, Revolutionary Socialism.

Third. That Capitalism and the Natural Rights philosophy are inextricably interlinked and intertwined.

It is true that in his closing chapter, he carefully avoids drawing the conclusion that Socialism is inevitable, but he does assert clearly enough that the only alternative is the revival and vigorous development of "warlike enterprise and prowess." He describes the effect of this latter alternative in one of his best ironical passages as follows: "The regime of status, fealty, prerogative, and arbitrary command would guide the institutional growth back into the archaic conventional ways and give the cultural structure something of that secure dignity and stability which it had before the times, not only of socialistic vapors, but of natural rights as well. Then, too, the rest of the spiritual furniture of the ancient regime shall presumably be reinstated; materialistic skepticism may yield the ground to a romantic philosophy, and the populace and the scientists alike may regain something of that devoutness and faith in preternatural agencies which they have recently been losing. As the discipline of prowess again comes to its own, conviction and contentment with whatever is authentic may return to distracted Christendom, and may once more give something of a sacramental serenity to men's outlook on the present and the future." (P. 399).

Any one who can believe that Prof. Veblen really regards this alternative as a possibility must have been born devoid of a sense of humour.

But Prof. Veblen teaches the inevitability of Socialism much more clearly than this, as may be seen by linking together the two following quotations from the chapter on the "Cultural Incidence of the Machine Process":

"The discipline of the modern industrial employments is relatively free from the bias of conventionality, but the difference between the mechanical and the business occupations in this [731] respect is a difference of degree. It is not simply that conventional standards of certainty fall into abeyance for lack of exercise, among the industrial classes. The positive discipline exercised by their work in good part runs counter to the habit of thinking in conventional, anthropomorphic terms, whether the conventionality is that of natural rights or any other. And in respect of this positive training away from conventional forms, there is a large divergence between the several lines of industrial employment. In proportion as a given line of employment has more of the character of a machine process and less of the character of handicraft, the matter-of-fact training which it gives is more pronounced. In a sense more intimate than the inventors of the phrase seem to have appreciated, the machine has become the master of the man who works with it and an arbiter in the cultural fortunes of the community into whose life it has entered.

"The intellectual and spiritual training of the machine in modern life, therefore, is very far-reaching. It leaves but a small proportion of the community untouched; but while its constraint is ramified throughout the body of the population, and constrains virtually all classes at some point in their daily life, it falls with the most direct, intimate and unmitigated impact upon the skilled mechanical classes, for these have no respite from its mastery, whether they are at work or at play.

"The ubiquitous presence of the machine, with its spiritual concomitant — working ideals and scepticism of what is only conventionally valid — is the unequivocal mark of the Western culture of today as contrasted with the culture of other times and places. It pervades all classes and strata in a varying degree, but on an average in a greater degree than at any time in the past, and most potently in the advanced industrial communities and in the classes immediately in contact with the mechanical occupations. As the comprehensive mechanical organization of the material side of life has gone on, a heightening of this cultural effect throughout the community has also supervened, and with a farther and faster movement in the same direction a farther accentuation of this "modern" complexion of culture is fairly to be looked for, unless some remedy be found. And as the concomitant differentiation and specialization of occupations goes on, a still more unmitigated discipline falls upon ever widening classes of the population, resulting in an ever weakening sense of conviction, allegiance, or piety toward the received institutions." (pp. 322-3-4.)

"With such generality as commonly holds in statements of this kind, it may be said that the modem socialistic disaffection is loosely bound up with the machine industry — spreading where this industry spreads and flourishing where this industry gives [733] the dominant note of life. The correlation between the two phenomena is of such a kind as to leave no doubt that they are causally connected; which means either that the machine industry, directly or indirectly, gives rise to socialism, or that the two are expressions of the same complex of causes. The former statement probably expresses the truth of the case in great part, but the latter need not therefore be false. Wherever and in so far as the increase and diffusion of knowledge has made the machine process and the mechanical technology the tone-giving factor in men's scheme of thought, there modem socialistic iconoclasm follows by easy consequence." (pp. 354-5.)

Here we have a conclusive demonstration of the inevitability of socialism, and with a change of terminology the argument is precisely the same with which it is to be hoped readers of this Review are familiar in the Communist Manifesto and in Engel's "Socialism: Utopian and Scientific."

The revolutionary character of the "socialistic iconoclasm" generated by the cultural discipline of the machine process is well brought out in the following passage:

"The machine process gives no insight into questions of good and evil, merit and demerit, except in point of material causation, nor into the foundations or the constraining force of law and order, except such mechanically enforced law and order as may be stated in terms of pressure, temperature, velocity, tensile strength, etc. The machine technology takes no cognizance of conventionally established rules of precedence; it knows neither manners nor breeding and can make no use of any of the attributes of worth. Its scheme of knowledge and of inference is based on the laws of material causation, not on those of immemorial custom, authenticity or authoritative enactment. Its metaphysical basis is the law of cause and effect, which in the thinking of its adepts has displaced even the law of sufficient reason.

"The range of conventional truths, or of institutional legacies, which it traverses is very comprehensive, being, indeed, all-inclusive. It is but little more in accord with the newer, eighteenth-century conventional truths of natural rights, natural liberty, natural law, or natural religion, than with the older norms of the true, the beautiful, and the good which these displaced. Anthropomorphism, under whatever disguise, is of no use and of no force here." (pp. 311-2).

Does not this suggest to the reader's mind this paragraph from the Communist Manifesto?

"The Communist revolution is the most radical rupture with traditional property-relations; no wonder that its development involves the most radical rupture with traditional ideas."

But it is above all the difference in the mental processes of the [733] conservatives and of those "tainted" with the "socialistic disaffection," which makes compromise and half-measures impossible, and makes modem socialism, our socialism, whether we will or no, revolutionary. That two classes differently circumstanced materially and economically should reason differently is a logical corollary from Marxian principles, so that it is in vain that Walling and Veblen attempt to differentiate the Veblen class-struggle from the Marxian class-struggle.

Prof. Veblen tells us:

"Leaving aside the archaic vocations of war, politics, fashion, and religion, the employments in which men are engaged may be distinguished as pecuniary or business employments on the one hand, and industrial or mechanical employments on the other hand. ...*..*..* There is an appreciable and widening difference between the habits of life of the two classes; and this carries with it a widening difference in the discipline to which the two classes are subjected. It induces a difference in the habits of thought and the habitual grounds and methods of reasoning resorted to by each class. There results a difference in the point of view, in the facts dwelt upon, in the methods of argument, in the grounds of validity appealed to; and this difference gains in magnitude and consistency as the differentiation of occupations goes on. So that the two classes come to have an increasing difficulty in understanding one another and appreciating one another's convictions, ideals, capacities, and short comings.

"The ultimate ground of validity for the thinking of the business classes is the natural-rights ground of property, — a conventional anthropomorphic fact having, an institutional validity, rather then a matter-of-fact validity such as can be formulated in terms of material cause and effect; while the classes engaged in the machine industry are habitually occupied with matters of causal sequence, which do not lend themselves to statement in anthropomorphic terms of natural rights and which afford no guidance in questions of institutional right and wrong, or of conventional reason and consequence. Arguments which proceed on material cause and effect can not be met with arguments from conventional precedent or dialectically sufficient reason, and conversely." (pp. 314 and 317-8).

Is it a violent inference to conclude that when conflicting material interests hurl against one another two classes that have absolutely no common ground in the realm of reason, the conflict can be settled by force alone, whether that force be the force of the workers' folded arms or the force of bullets and bombs? At any rate we may be quite sure the socialist inconoclast moulded by the cultural discipline of the machine process will not shrink from the use of force whenever and wherever the circumstances make its use expedient.

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...

... If this account of the class limitation of the socialist bias is accepted, it has an immediate bearing upon a question which is latterly engaging the attention of the advocates of socialism. The question is as to the part played by propertyless office employees and by the business men whom the modern consolidations of business reduce to the position of salaried managers and superintendents. With a faith prompted by their own hopes rather than by observed facts or by the logic of events, the spokesmen for socialism are strongly inclined to claim this "business proletariat" as a contingent which the course of economic development is bound to throw into the socialist camp. The facts do not in any appreciable degree countenance such an expectation. The unpropertied classes employed in business do not take to socialistic vagaries with such alacrity as should inspire a confident hope in the advocates of socialism or a serious apprehension in those who stand for law and order. This pecuniarily disfranchised business population, in its revulsion against unassimilated facts, turns rather to some excursion into pragmatic romance, such as Social Settlements, Prohibition, Clean Politics, Single Tax, Arts and Crafts, Neighborhood Guilds, Institutional Church, Christian Science, New Thought, or some such cultural thimble rig." (pp. 351-2).

"What may be called the normal socialism, socialism of the later, more dangerous, and more perplexing, kind, does not build on the received metaphysical basis of the 'natural order.' It [735] demands a reconstruction of the social fabric, but it does not know on what lines the reconstruction is to be carried out. The natural rights of the individual are not accepted as the standard (except by certain large bodies of neophytes, especially rural Americans, who are carrying under socialist mottoes the burden of animosities and preconceptions that once made populism,) but nothing definite is put in the place of this outworn standard." (p. 339).

Veblen's view of "immediate demands" in a socialist platform may be inferred from the following foot note reference to Hobson, a typical "intellectual" socialist:

"Hobson (Problem of the Unemployed), whose analysis of overproduction and its relation to depression goes farther than any other, reviews and criticises (ch. VII) the palliative measures that have been advocated. He finds them, all and several, inadequate and inconsequent, in that they do not touch the root of the evil — oversaving or 'underconsumption.' They do not touch this because they do not mitigate the automatic saving and investment process that necessarily goes with the possession of large private incomes. But in point of practical efficiency his own proposed remedies must also be scheduled under the head of 'palliatives.' These proposed remedies are measures looking, to a 'Reformed Distribution of Consuming Power (ch. VI), such as taxation of 'unearned' incomes, higher wages, shorter working day. The aim is, to increase the proportion of the total wealth of the community, which falling to them as wages shall be spent in raising the general standard of working-class consumption.' The contemplated move is manifestly chimerical in any community, such as the modern industrial communities, where public policy is with growing singleness of purpose guided by business interests with a naive view to an increase of profits." (p. 257.)

Prof. Veblen's second chapter on "Business Principles" shows, that the metaphysical basis of the business or capitalist concept of ownership, of property, is derived from the Natural Rights philosophy as expounded by Locke.

"It became a principle of the natural order of things that free labor is the original source of wealth and the basis of ownership. In point of historical fact, no doubt, such was not the pedigree of modern industry or modern ownership; but the serene, undoubting assumption of Locke and his generation only stands out the more strongly and unequivocally for this its discrepancy with fact." (Veblen pp. 78-9.)

"Political economy confuses on principle two very different kinds of private property, of which one rests on the producers' own labor, the other on the employment of the labor of others. It forgets that the latter not only is the direct antithesis of the former, but absolutely grows on its tomb only." (Marx, Capital, Vol. I p. 488, Humboldt Edition.)
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"Such a concept belongs to the regime of handicraft and petty trade, and it is from, or through, the era of handicraft that it has come down to the present." (Veblen p. 79.)

This thought is more fully elaborated in the eighth chapter on "Business Principles in Law and Politics," as will be seen by the following excerpts:

"Modern (civilized) institutions rest, in great part, on business principles." "Legislation and legal decisions are based on the dogma of Natural Liberty. This is peculiarly true as regards the English-speaking peoples, the foundation of whose jurisprudence is the common law, and it holds true in an especial degree of America. The dogma of natural liberty is peculiarly conducive to an expeditious business traffic and peculiarly consonant with the habits of thought which necessarily prevail in any business community.

"The current body of natural rights preconceptions antedates the modern business situation. The scheme of natural rights grew up and found secure lodgement in the common sense of the community, as well as with its lawgivers and courts, under the discipline of the small industry and petty trade ('domestic industry') whose development culminated in the eighteenth century." "The movement of opinion on natural-rights ground converged to an insistence on the system of natural liberty, so called. But this insistence on natural liberty did not contemplate the abrogation of all conventional prescription. 'The Simple and obvious system of natural liberty' meant freedom from restraint on any other prescriptive ground than that afforded by the rights of ownership. In its economic bearing the system of natural liberty meant a system of free pecuniary contract." "This principle of natural (pecuniary) liberty has found its most unmitigated acceptance in America, and has here taken the firmest hold on the legal mind. Nowhere else has the sacredness of pecuniary obligations so permeated the common sense of the community, and nowhere does pecuniary obligation come so near being the only form of obligation that has the unqualified sanction of current common sense. Here, as nowhere else, do obligations and claims of the most diverse kind, domestic, social, and civil, tend to take the pecuniary form and admit of being fully discharged on a monetary valuation. To a greater extent than elsewhere public esteem is awarded to artists, actors; preachers, writers, scientists, officials, in some rough proportion to the sums paid for their work." "Freedom of contract is the fundamental tenet of the legal creed, so to speak, inviolable and inalienable; and within the province of law and equity no one has competence to penetrate behind this first premise or to question the merits of the natural-rights metaphysics on which it rests." "As should fairly be expected, the higher courts, who are presumably in more [737] intimate touch with the principles of jurisprudence, being more arduously trained and more thoroughly grounded in the law at the same time that they have also presumably a larger endowment of legal acumen — ^these higher courts speak more unequivocally for the metaphysical principles and apply them with a surer and firmer touch. In the view of these higher adepts of the law, free contract is so inalienable a natural right of man that not even a statutory enactment will enable a workman to forego its exercise and its responsibility. By metaphysical necessity its exercise attaches to the individual so indefeasibly that it cannot constitutionally be delegated to collective action, whether legislative or corporate." (pp. 68 to 280).

How beautifully the recent decision of the United States Supreme Court declaring unconstitutional the New York State law making ten-hours a legal working-day in bake-shops illustrates and enforces these remarks of Prof. Veblen!

Now, just as the Natural Rights philosophy is the metaphysical basis of capitalist apologetics, so the most marked characteristic of socialism is not so much a tendency to reject, as an utter incapacity to comprehend this same philosophy. In Veblen's words, "the immediate point of danger in the socialistic disaffection is a growing disloyalty to the natural rights institution of property."

That socialism meant a total rejection of the whole natural rights scheme, including Natural Liberty, was clearly enough understood by Marx and Engels, as witness this sentence from the Communist Manifesto:

"The abolition of bourgeois individuality, bourgeois independence, and bourgeois freedom is undoubtedly aimed at."

Prof. Veblen points out that it is this rejection of natural rights and Natural Liberty which differentiates socialism most clearly from anarchy. He says:

"In their negative proposals the socialists and anarchists are fairly agreed. It is in the metaphysical postulates of their protest and in their constructive aims that they part company. Of the two, the socialists are more widely out of touch with the established order. They are also more hopelessly negative and destructive in their ideals, as seen from the standpoint of the established order. This applies to the later socialists rather than to the earlier, and it applies, of course, only to the lower-class, democratic socialists, not to the so-called state and Christian socialists.

Anarchism proceeds on natural-rights ground, and is accordingly in touch with the postulates of the existing property arrangements to that extent. It is a more unmitigated working out of the same postulates. It is a system of 'natural liberty' unqualified to the extent even of not admitting prescriptive ownership. Its basis is a (divinely instituted) order of nature, the [738] keynote of which is an inalienable freedom and equality of the individual, quite in the eighteenth century spirit It is in this sense an off shoot of the Romantic school of thought. Anarchism is a de jure scheme, which takes no account of mechanical exigencies but rests its case altogether on anthropomorphic postulates of natural-rights. It is, from the natural-rights standpoint, substantially sound, though senselessly extreme." (pp. 338-9.)

In the light of all this how absurd was the spectacle of an American Socialist convention adopting an American Socialist platform representing the American socialist party as the defender of the (capitalist and anarchist) idea of (natural) liberty in which this nation was born! Let us hope the party will provide each member of its next platform committee with a copy of Veblen's "Business Enterprise", and (will Comrade Walling regard me as hopelessly behind the times if I add?) the Communist Manifesto.

It is true the S. L. P. also has a natural-rights platform, though the natural-rights philosophy is not so obnoxiously in the foreground as it is in ours, but I do not care to dwell on the shortcomings of the S. L. P. as it is always painful to speak ill of the dead.

I am unable to agree with Prof. Veblen's contention that "the pervading characteristic of the trade-union animus is the denial of the received natural-rights dogmas wherever the mechanical standardization of modern industry traverses the working of these received natural rights." (pp. 328-9). For reasons that I gave at length in this Review about a year ago, it seems to me that the pure and simple craft unions in defending their ordinary methods must have recourse to the same natural-rights philosophy upon which capitalism relies. It is only in the later developments of industrial unionism that I can perceive a tendency to break with the natural-rights philosophy.

Indeed I am inclined to think it would be a matter of no great difficulty to disprove Prof. Veblen's statement that "the growth of trade-unionism and of what is called the trade-union spirit is a concomitant of industry organized after the manner of a machine process." (p. 327.) There is much reason for maintaining on the contrary that unions are strongest in just those trades that are most nearly akin to handicrafts, and that the more machinery dominates a given trade the weaker either numerically or in efficiency do the unions in that trade become. If this be true, the largest and most powerful unions would be composed of just those workmen who had been least exposed to the cultural discipline of the Machine Process. I do not care to press this point, but it appears to me to afford at least a very fair working hypothesis to account for the ultra-conservative attitude of the American Federation of Labor.

[739] In conclusion, to speak plainly, let me say that I regard Veblen's as the very greatest intellect that has been applied to economic and social questions since Marx and Engels; but, that if, as is not unlikely, he is about (to use George Ade's phrase) to "break into" the Socialist Party I shall not blister my hands celebrating the event. Why not? Because nine out of ten intellectuals who join the movement do so to lead it and not to serve it, and nine out of the said nine, if they attain leadership, prove misleaders. The only one who is ever worthy of trust in the movement is the one out of the ten who joins not to lead, but to serve.

In Veblen's case his straining after what he would call the "renown" of originality (when he was for the most part merely revamping Marxian doctrines) and his failure to give due credit to Marx, Engels and others, does not inspire me with confidence.

In general, when I hear that a new "intellectual" has joined the party my feelings are much the same as those of a sailor who sees a storm-signal hoisted when he is about to sail. The intellectual who will come in with the clear understanding that there are no reserved seats and all the benches are hard, will always have a comrade's welcome from me; but, frankly, what is the use of jumping out of the frying-pan of Herronism into the fire of Veblenism?

Robert Rives LaMonte.
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